Schneider Introduces Legislation to Ease Tax Burden on Small Businesses Affected by Coronavirus Outbreak
Bill would expand timeframe for small businesses to “carryback” operating losses from COVID-19 in order to lower total taxable income
Earlier this week, Congressman Brad Schneider (IL-10) introduced legislation to help American small businesses dealing with economic fallout of the coronavirus (COVID-19) epidemic.
H.R. 6367 would allow small businesses with fewer than 250 employees to spread their net operating losses over a "carryback" period of five years, to provide much needed tax flexibility to hardworking Americans.
"The coronavirus epidemic has presented unprecedented challenges to small businesses across the country," said Schneider. "Congress has a responsibility to be there for small businesses and the families they employee during these difficult times. Allowing small businesses to spread net operating losses caused by the coronavirus over future tax years is another way to provide relief and ensure small businesses, the engine of the American economy, can more quickly recover."
As the COVID-19 epidemic grows, small business owners, employees, and families across the country risk tightened budgets, with the additional threat of unprecedented, unforeseen operating losses. Under the Tax Cuts and Jobs Act of 2018, the Trump administration eliminated small businesses' ability to reclaim prior tax payments collected by the Internal Revenue Service (IRS) to offset current losses. This legislation would restore their ability for up to the past five years, returning additional income to keep small businesses afloat. Section 2303 of the Senate-passed coronavirus response legislation contained similar language enacting a 5-year carryback provision on NOLs.